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Riding the wave of foreign investment

Not since pre GFC (circa 2007) has Melbourne’s CBD seen the exponential property investment it has experienced in the last financial year.

The CBD has seen sales of approximately $3.47 billion so far in 2014 having soared past the previous record of $2.9 billion spent in 2007. The interesting point is that around 50 per cent of the CBD’s major sales have been accounted for by a wave of Asian investment.

The sale of a pair of office sites sold for a whopping $1 billion, caps off a record breaking year of investment in the CBD with estimates of around $3.5 billion having already been spent on office towers in 2014.

Notwithstanding the wave of foreign investment, local buyers have also hit back hard with approximately $1 billion combined sales including properties on the corner of Bourke and William Street going for $608.1 million and 700 Bourke St for $433.5 million.

Top skyscraper sales in Melbourne’s CBD

Address

Buyer

Seller

Price

Month

321 Exhibition St

Invesco (American)

Cromwell

$208,000,000

July

700 Bourke St

AMP Capital (Australian)

CBUS (Colliers/Savills)

$433,500,000

September

93-119 Kavanagh St, Southbank

PJ Development Holdings (Malaysia)

Banco Group (Knight Frank)

$145,000,000

June

CBW (Corner of Bourke and
William St)

GPT Group (Australian)

CBUS (Colliers/

Savills)

$608,100,000

September

QBE House

M&G Real Estate (UK)

Investa Office Fund (Colliers)

$135,000,000

January

Source: Herald Sun and Knight Frank

The strong sales have been attributed to the low interest environment, the weight of money from domestic super funds and offshore investors and an improving market. CBRE director Mark Wizel said “offshore buyers were not land banking in the CBD but moving to develop sites, helping to stimulate the local economy.”